Rapamycin inhibits the TOR kinases, which regulate cell proliferation and mRNA translation and are conserved from yeast to man. The TOR kinases also regulate responses to nutrients, including sporulation, autophagy, mating, and ribosome biogenesis. We have analyzed gene expression in yeast cells exposed to rapamycin using arrays representing the whole yeast genome. TOR inhibition by rapamycin induces expression of nitrogen source utilization genes controlled by the Ure2 repressor and the transcriptional regulator Gln3, and globally represses ribosomal protein expression. gln3 mutations were found to confer rapamycin resistance, whereas ure2 mutations confer rapamycin hypersensitivity, even in cells expressing dominant rapamycin-resistant TOR mutants. We find that Ure2 is a phosphoprotein in vivo that is rapidly dephosphorylated in response to rapamycin or nitrogen limitation. In summary, our results reveal that the TOR cascade plays a prominent role in regulating transcription in response to nutrients in addition to its known roles in regulating translation, ribosome biogenesis, and amino acid permease stability.